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Well, here we are – the end of another year. As we rapidly approach New Years, it’s common to look back and evaluate progress (or lack thereof) that was made during the year. Maybe you finally paid off that debt. Maybe you finally fixed that creaky floorboard in your house. Or maybe it was progress you made in your professional life…like learning a new skill, developing your team, or making new connections. We all have personal and professional goals that we strive to accomplish over the course of our lives and the MAG’s Collaboration Pillar is no different.
Collaborating is a necessity in payments. It just doesn’t work without it. There are so many different parties in this industry that play different, but all very vital, roles that without working together to look at different perspectives, it fails. At the MAG, Collaboration is one of the marquee pillars that services as the foundation for its underlying mission – to drive positive change and innovation in the payments industry that serves merchants interests. We can summarize this effort in two ways:
- Merchant Networking
- I like to think of every Collaboration Committee meeting as a SIG in a way. In our largest committee, merchants come together here to network and discuss challenges and opportunities that exist in payments and brainstorm on how to collaborate with those partners in our ecosystem that drive so many of the guardrails that merchants must adhere to. These meetings run the gamut from discussing breaking headline news to sharing updates from meetings with the networks, to outlining strategies for progressing forward.
- I like to think of every Collaboration Committee meeting as a SIG in a way. In our largest committee, merchants come together here to network and discuss challenges and opportunities that exist in payments and brainstorm on how to collaborate with those partners in our ecosystem that drive so many of the guardrails that merchants must adhere to. These meetings run the gamut from discussing breaking headline news to sharing updates from meetings with the networks, to outlining strategies for progressing forward.
- External Partner Discussions
- On a monthly basis, MAG Staff and the merchant co-chairs of the committee meet with Visa, Mastercard, American Express and Discover to not only work on open items of existing challenges, but also to learn about forthcoming products or rule changes that will impact merchants so we can get a better handle on them and prepare for their impact. The ultimate goal in these sessions is to work together in making positive change but also to share feedback and provide input on in-progress developments.
- We also meet with acquirers throughout the year through the Acquirer Advisory Council. In 2023, MAG Staff and members from its Board will meet with each acquirer individually, and then gather together in a large group setting at the Annual Conference in Atlanta in September 2023. These discussions include updates from each MAG pillar as well as discussing top open items from an Advocacy and Collaboration perspective.
There have been many, many instances where collaboration has had a positive impact on merchants over the past few years – and 2022 was no different.
- Compelling Evidence Rule Changes (First Party Fraud) – Visa and Mastercard
- In 2022, both Visa and Mastercard shared with MAG Merchants their plans to update existing rules around what is considered compelling evidence in order to better address friendly fraud. They heard feedback from merchants in several sessions through the Omnichannel Community of Practice that friendly fraud – where the cardholder is disputing a transaction that they (or their family member) actually did conduct whether intentionally or unintentionally - was increasing, yet merchants were doing everything they could to risk-assess the consumer, yet they were still liable for the resulting fraud. The new rules, some of the details of which still need to be ironed out, allow merchants to share specific data elements in a dispute response (or in the authorization in some cases) showing that the cardholder had conducted previous transactions with that merchant without a dispute. In these cases, the merchant no longer would bear liability for those transactions. This is an example where Collaboration works – and productive sessions can lead to positive change.
- In 2022, both Visa and Mastercard shared with MAG Merchants their plans to update existing rules around what is considered compelling evidence in order to better address friendly fraud. They heard feedback from merchants in several sessions through the Omnichannel Community of Practice that friendly fraud – where the cardholder is disputing a transaction that they (or their family member) actually did conduct whether intentionally or unintentionally - was increasing, yet merchants were doing everything they could to risk-assess the consumer, yet they were still liable for the resulting fraud. The new rules, some of the details of which still need to be ironed out, allow merchants to share specific data elements in a dispute response (or in the authorization in some cases) showing that the cardholder had conducted previous transactions with that merchant without a dispute. In these cases, the merchant no longer would bear liability for those transactions. This is an example where Collaboration works – and productive sessions can lead to positive change.
- Introducing Incremental Auth and Partial Auth reversals – American Express
- A challenge that merchants have long advocated for – AMEX shared the news with us that beginning in 2024, they would begin supporting incremental authorization and partial authorization reversals. An example of where this will be beneficial is in the case of table service restaurants who often need to authorize the full tip amount in order to avoid “no authorization” chargebacks on high tip values. The ability to perform an incremental authorization on an existing transaction will benefit these merchants tremendously. AMEX has been working with merchants over the last year – beginning when they increased their tip threshold from 20% to 30% - to better understand the pain points with the lack of authorization functionality that other networks offer.
- A challenge that merchants have long advocated for – AMEX shared the news with us that beginning in 2024, they would begin supporting incremental authorization and partial authorization reversals. An example of where this will be beneficial is in the case of table service restaurants who often need to authorize the full tip amount in order to avoid “no authorization” chargebacks on high tip values. The ability to perform an incremental authorization on an existing transaction will benefit these merchants tremendously. AMEX has been working with merchants over the last year – beginning when they increased their tip threshold from 20% to 30% - to better understand the pain points with the lack of authorization functionality that other networks offer.
- Network Buy Now, Pay Later Changes to Consumer Experience – Mastercard
- First announced in February, Mastercard will be rolling out their own BNPL solution that will work on any enabled card and be able to be used at any merchant that chooses to accept it. Mastercard endured many rounds of feedback-gathering sessions with the BNPL Community of Practice as well as the Collaboration Committee and as a result of those discussions made several changes to the product before launch. These include:
- Allowing consumers to search for accepting merchants after they are approved for the line of credit in order to minimize issues at the POS
- Generating a push notification that will go out to consumers when they use the card against policy (for example, at a merchant that has opted out, or is trying to use the card for a purchase less than $50) in order to alleviate the negative perception of the merchant
- Creating a Frequently Asked Questions document that answered many of the questions posed by merchants
- First announced in February, Mastercard will be rolling out their own BNPL solution that will work on any enabled card and be able to be used at any merchant that chooses to accept it. Mastercard endured many rounds of feedback-gathering sessions with the BNPL Community of Practice as well as the Collaboration Committee and as a result of those discussions made several changes to the product before launch. These include:
- Hosting a network-direct webinar on release updates - Discover
- One of the common points of frustration we hear often is the sometimes lack of transparency or clarity received in acquirer-hosted release updates, given that the rules and policies are governed by the networks themselves. MAG has been working, in partnership with merchants, to extend an invitation for the networks to host a MAG webinar where they can speak directly to merchants and provide details on upcoming changes. Discover will be the first to host such a webinar in early 2023 – another example of a commitment to hear directly from, and answer merchant questions.
It is normal and natural to focus on the things we didn’t accomplish – and how much work is still left to be done in order to create an equitable payments ecosystem (job security for us all? 🙂). But I’d like us all, as we enter the holiday season and are grateful for everything we have, to appreciate how far we have come. The little things add up and are the building blocks to a future where all participants in the payments industry have an equitable role – so let us appreciate working together to solve common problems. Let us continue educating industry stakeholders on our perspectives and challenges. Let us continue to amplify our voices in a productive manner for the greater good of all merchants.
So in closing – get involved. Let us hear your voices. Let us hear your challenges. Let others know they are not alone in their fight and let’s spend 2023 together…continuing to collaborate.